The network of global corporate control

TL;DR

This paper maps the global ownership network of transnational corporations, revealing a giant bow-tie structure with a core of financial institutions that controls a significant portion of the global economy, impacting market competition and stability.

Contribution

It presents the first comprehensive analysis of the international corporate control network, introducing a new methodology to assess control globally.

Findings

Transnational corporations form a giant bow-tie network.

A small core of financial institutions holds a large control share.

The core acts as an economic 'super-entity' with significant influence.

Abstract

The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers.